Section 9 ex parte injunctions are appealable, but interim relief fails when the underlying contract is contingent and unenforceable.

An ex parte ad-interim injunction granted under Section 9 of the Arbitration and Conciliation Act, 1996 was treated as an appealable interim measure under Section 37(1)(a). The underlying development arrangement was held not to be specifically enforceable because it remained contingent on material preconditions and later became frustrated and impossible to perform, so interim injunction could not be sustained in aid of specific performance. Relief also failed under the negative covenant route, because Section 42 of the Specific Relief Act, 1963 cannot be used to indirectly enforce an unenforceable contract, and the case was not pleaded or decided on that basis.

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Issues: (i) Whether an ex parte ad-interim injunction granted under Section 9 of the Arbitration and Conciliation Act, 1996 is an appealable interim measure under Section 37(1)(a); (ii) whether the underlying development arrangement was specifically enforceable or had become a contingent and frustrated contract so as to bar injunction; (iii) whether relief could be sustained on the basis of a negative covenant under the Specific Relief Act, 1963.

Issue (i): Whether an ex parte ad-interim injunction granted under Section 9 of the Arbitration and Conciliation Act, 1996 is an appealable interim measure under Section 37(1)(a).

Analysis: An application under Section 9 was held to give rise to an original civil proceeding, to which the procedural law in the Code of Civil Procedure, 1908 applies. The power to grant interim protection under Section 9 includes the power to grant injunctions, and the procedure in Order XXXIX, including the rule enabling ex parte injunctions, governs such relief. The fact that the injunction was passed without notice did not take it outside the ambit of an interim measure, and the appellate provision was construed to cover such orders.

Conclusion: The appeal against the ex parte ad-interim injunction was maintainable.

Issue (ii): Whether the underlying development arrangement was specifically enforceable or had become a contingent and frustrated contract so as to bar injunction.

Analysis: The arrangement required performance of material steps, including removal of shops outside the suit land, before the development agreement could be completed. The Court treated the bargain as contingent in nature and held that, until the contingency occurred, there was no concluded and specifically enforceable contract. The later correspondence showed that the draft development agreement was not in conformity with the term sheet and memorandum of understanding, and the contemplated performance had become impossible. A contract that is determinable, contingent, or frustrated cannot be specifically enforced, and where specific performance is unavailable, injunction is ordinarily barred.

Conclusion: The contract was not specifically enforceable and had become frustrated, so interim injunction could not be sustained.

Issue (iii): Whether relief could be sustained on the basis of a negative covenant under the Specific Relief Act, 1963.

Analysis: Section 42 permits enforcement of a negative stipulation only where the court is otherwise unable to compel the affirmative agreement and where enforcing the negative promise would not indirectly amount to specific performance of an unenforceable contract. On the admitted facts, the injunction would have operated as a surrogate for specific performance of an unconcluded and impossible contract, rather than merely preserving a separable negative obligation. The case was also not pleaded or decided as one falling under Section 42.

Conclusion: Relief could not be justified on the basis of a negative covenant.

Final Conclusion: The interim order was unsustainable because the contract lacked present enforceability and the injunction went beyond permissible interim protection in aid of arbitration.

Ratio Decidendi: An ex parte injunction under Section 9 of the Arbitration and Conciliation Act, 1996 is appealable, but interim protection cannot be granted where the underlying agreement is not specifically enforceable or has become contingent or frustrated, and Section 42 of the Specific Relief Act, 1963 cannot be used to indirectly enforce such an unenforceable contract.

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